Barista-stand owner faces prostitution charge

EVERETT, Wash. (AP) — The owner of bikini coffee stands in Washington state banked more than $2 million in just three years because her baristas were also selling sex acts, according to local prosecutors.

Snohomish County prosecutors charged Carmela Panico, a 52-year-old former nude dancer, with promoting prostitution and money laundering, alleging that she operated drive-thru brothels throughout the county north of Seattle, The Everett Herald reported Thursday (http://bit.ly/1lliY1P ).

Her baristas made money mostly on tips, saying they could earn hundreds of thousands of dollars, authorities said. The women said they could make up to $14 for baring their breasts or genitals and charged more for sex acts, according to charging documents.

"Panico's businesses were driven by prostitution and lewd behavior," Snohomish County deputy prosecutor Bob Hendrix wrote in the documents. Panico was charged Thursday, the newspaper reported.

Her attorney told Snohomish County Superior Court that she left the coffee business and sold some of her stands and leased others.

Authorities allege that she didn't report her full earnings to the Internal Revenue Service by dealing in large amounts of cash. A search at Panico's home last year resulted in the seizure of nearly $250,000.

The investigation has also led to the prosecution of a veteran sheriff's sergeant. Darrell O'Neill is accused of tipping off Panico and her workers to police scrutiny in return for sexual favors. O'Neill resigned after his arrest last year and has pleaded not guilty. His trial is scheduled for November.

Authorities allege that baristas had a certain dollar amount they were supposed to make for Panico, and the rest the women could keep.

"The sales goals were effectively rent that the girls paid to have the opportunity to perform lewd conduct or acts of prostitution," Hendrix wrote.

The documents say that Panico could deduct money if the women failed to wear high heels throughout their shifts, did not have a tan or failed to put on makeup.